Future of property seized by Communists divides Germany

KLEINMACHNOW, Germany -- People of the little suburba town of Kleinmachnow have taken to the streets in their fight to stay in the Hansel and Gretel houses where they live.

They come out on Saturday mornings to stand in polite groups of 200 to 500 at the roads into their town. There they turn aside traffic from Berlin and let people know of their complaint -- one more legacy of the Berlin Wall, whose bare-dirt scar is still visible here.

They protest government property policies that have allowed former owners in western Germany to make claims on 2,300 of 3,200 homes in Kleinmachnow in the three years since the reunification.

Questions of property ownership are rivaled only by unemployment as a force dividing the former East and West Germans. Kleinmachnow is only the most extreme case. Things aren't much better elsewhere.

"We have in Brandenburg 350,000 properties with claims on them. Out of 2.6 million people, a million are affected by restitution claims," says Klaus-Jurgen Warnick, head of a statewide housing union in Brandenburg, the state that surrounds Berlin and in which Kleinmachnow is situated.

"Westerners who sat and watched the wall come down on TV now claim the land," he said. "We are the losers and they are the winners. . . .

"We were lied to for 40 years, and we're being lied to again. We are always losers. We won't take it anymore. Forty years are enough."

Mr. Warnick has lived in Kleinmachnow for all but a few days of his 40 years. He built the house he lives in on land now claimed by a westerner, even though he "bought" it from the German Democratic Republic, the official name for the old East Germany.

Property title was a moot point in East Germany, since the state effectively owned everything. Some property was expropriated, some was nationalized, and some was simply ignored or forgotten. Bored Communist functionaries left a kind of chaos in land titles when East Germany died.

"Plot by plot"

The united Germany initiated a complicated program for restitution of property in the east to former owners or claimants. The law remains in flux as new rules, regulations and protections are considered or await governmental action.

"Everything is hanging in the air," Mr. Warnick says. "Very few claims have been settled -- 3 or 4 percent. Very easy claims. Most claims have to be resolved plot by plot. I think, at the earliest, in two or three years."

Many other observers suggest that land title claims won't be resolved for a decade or more.

"My private opinion is that everything in the west revolves around money," says Johannes Muench, 51, an engineer demonstrating for the Kleinmachnow renters' union. "We have lived different lives. When the west Germans come over here to claim their piece of land, they are not willing to negotiate.

"I have invested 40,000 marks [$26,000] in my house over the last 30 years. That doesn't interest them.

"We took care of the land for the last 30 years. Those people wouldn't even spend 25 marks to cross the wall and look at their land."

People entering East Germany from the west had to post a fee of 25 marks, about $16.

Rent in East Germany was about 100 marks a month for the handsome, though somewhat worn, tile-roofed cottages in which many Kleinmachnowers live. Rent now might be 250 marks a month, still low by the standards of western Germany, but it is scheduled to spurt to about 500 marks, or about $333, by the end of the year.

"Morally lacking"

Mr. Muench moved into his home when the former owners took their pension and moved west. East Germany allowed and even encouraged their pensioners to go to West Germany. Now the old owners are dead and their grandchildren are claiming the house.

"We say come and talk, and they send their lawyers," Mr. Muench says. "They dress very well and have money, but personally and morally they are lacking."

But even with the difficulties of settling property claims, a lively real estate market has developed in Kleinmachnow.

Mayor Klaus Nitzsche, a genial physicist with a bent for lecturing his listeners, says seven houses a week are sold in his town. There is considerable property speculation, and some houses are sold over and over again.

Property values have risen to 300 to 600 marks a square meter from a nominal 1 mark three years ago when East Germany still existed. An average lot in Kleinmachnow is 800 square meters, making its worth 240,000 to 480,000 marks ($160,000 to $320,000).

Property deals are held in check by protections built into the unification pact for east German tenants and homeowners such as Mr. Warnick who find they have built on land they may not own.

Rent controls make it impossible, for example, for buyers of tenanted property to get enough income to pay even the interest on mortgages of a couple of hundred thousand marks. That is one reason properties are sold again and again.